1. In Brief
In a significant recent judgment, Justice Sir Jeremy Cooke granted the applicants, three companies incorporated in Florida, a proprietary injunction and Stop Order, prohibiting any dealings in the shares of Sadapay Technologies Limited, a DIFC entity. This is the first time the DIFC Court considered the scope of its powers under RDC 46.38.
2. Key Takeaways
- The DIFC Court recognised that in applying for a Stop Order pursuant to RDC 46.38, the applicable test was that espoused by Lord Diplock in American Cyanamid [1975] UKHL: (i) there must be a serious issue to be tried on the merits, (ii) the balance of convenience must be in favor of the grant of an injunction and (iii) it must be just and convenient to grant the injunction.
- Given that a Stop Order is a form of injunctive relief, an applicant must provide the usual undertaking as to damages.
- Justice Sir Jeremy Cooke further recognised that a constructive trust could arise by operation of DIFC law in circumstances where a contract comes to an end because of one party’s failure to provide consideration. The recognition of a possible constructive trust was significant as RDC 46.34(2) provides that a Stop Order can only be granted against shares when an applicant claims a “beneficial interest” in those shares.
3. Background
Sadapay Private Limited, a company incorporated in the Republic of Pakistan, is a leading provider of payments services. Sadapay is a wholly owned subsidiary of Sadapay Technologies Limited, a DIFC Establishment (Sadapay DIFC).
The Applicants are three companies incorporated in the state of Florida. Pursuant to a share purchase agreement dated May 2024, the Applicants, as vendors, agreed to sell their shares in the Sadapay DIFC, to the Papara Group, a financial services group with interests in Turkey and expanding into other jurisdictions via acquisitions. The SPA provided that the Applicants would receive shares in the PPR Holdings AS (the Consideration Shares), the Turkish holding company of the Papara Group, in return for their shares.
However, in May 2025, before the Applicant’s received the Consideration Shares, Turkish authorities raided the Papara Group’s offices and arrested 13 senior persons including its founder as part of a serious criminal investigation. As such, all assets and shares of the PPR Holdings AS, its founder and the subsidiaries came under the control of the Turkish government. PPR Holdings AS is currently managed by the Savings Deposit Insurance Fund (SDIF), a government agency with authority to administer seized assets.
The Applicants had reason to believe that PPR Holdings AS and/or the SDIF was contemplating a sale of its shares in Sadapay DIFC. The Stop Order was sought and obtained without notice to “hold the ring” pending an underlying LCIA arbitration.
4. Seek Legal Counsel:
The application for a Stop Order was managed by Rabih Tabbara and advocacy before Justice Sir Jeremy Cooke was undertaken by William Prasifka.
For further information, please contact, Rabih Tabbara, Partner, on rabih.tabbara@habibalmulla.com and William Prasifka, Partner on william.prasifka@habibalmulla.com